That one asset will be vital during the “dramatic settlement” – and you probably already own it
The stock market continues to hit new record highs. But trouble is looming, according to famous investor Rick Rule
“If you postpone a settlement, you almost always have to repay with interest,” warned Rule in an interview earlier this month.
The former President and CEO of Sprott US Holdings believes the overall monetary policy of the Fed will have dire consequences.
“The fact that you can step through on other people’s money today and tomorrow and the day after tomorrow means that when society has to pay the bill itself, the bill is ultimately much, much, much bigger.”
The good news? Rule also suggested a few safe havens to keep yourself safe.
This may seem counter-intuitive as inflation is undermining the purchasing power of cash holdings.
But even in this environment – where you don’t make a lot from savings accounts – Rule still believes in having some cash on hand.
“One circumstance where you have a dramatic calculation, like in 2008 or 1987 or 1990, when liquidity bottlenecks occur in the market, it will temporarily lower the price of everything,” he told Stansberry Research.
“Having cash gives you the tools and the courage to take advantage of this instead of being taken advantage of.”
In other words, cash acts as dry gunpowder, allowing investors to take advantage of opportunities when things take a dramatic turn south.
Buy some gold and silver
It is obvious. Given all of the Fed’s money creation, Rule pointed out the importance of owning gold and silver.
And the nice thing about it? You don’t have to have too much of it.
âWhen you have a circumstance where the fiat goes to hell in a hand basket, the profit you make on your gold and silver that a small insurance premium, that is, a small inventory of physical gold and silver, means a very big deterioration compensates in the purchasing power of your fiat currency. “
âYou will definitely save part of your assets in gold and silver,â emphasized Rule.
Don’t forget: There are also mining companies that are well positioned for a precious metals boom.
For example, Wheaton Precious Metals, Pan American Silver and Coeur Mining tend to do well with rising silver prices. Meanwhile, Barrick Gold, Newmont and Freeport-McMoRan could see serious returns on a gold rally.
And these days you can build your own safe haven portfolio using only your free pennies.
Have good quality farmland
Real estate is another classic hedge against rising inflation and interest rates.
However, Rule stated that “the only sector” he is increasing his personal exposure to real estate is in high quality farmland – particularly in the upper Midwest
“As far as I can buy very good quality farmland in the Upper Midwest, I’m very aggressive,” he said.
More and more investors are warmed up to the idea of ââfarmland, and for good reason: No matter what the economy does, people will still have to eat.
As an intrinsically valuable commodity, farmland can be an ideal hedge because it hardly correlates with the ups and downs of the stock market.
Between 1992 and 2020, U.S. farmland averaged 11% per year. In the same period, the S&P 500 only achieved an 8% return.
And nowadays you don’t have to get your hands dirty to get in on the action.
New platforms allow you to invest in US farmland by getting involved in the farm of your choice.
You generate cash income from the lease fees and the harvest sales – and also a long-term increase in value.
This article is for information only and is not intended as advice. It is provided without any guarantee.